The new 5.50% baby bonds from B Riley (RILYK) are now trading on NASDAQ.
Shares last crossed at $24.95.
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11/22/2024
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Hi Mark,
We liquidated our RILYZ positions over multiple days last week for an average price of $25.30/share. I’m not in front of my terminals now so I can’t investigate specifics for you but be it cap gains, accrued interest, or a combo of the 2 – I cashed out for a gain of 30c/share over the call price. Had I held on a few more days until the call yanked the shares, what would have happened to that 30c?
Since this is ETD, it should trade ‘flat’, so I would tend to believe that some interest is yet to come your way. Whether it’s enough to make up for that loss in share price when it dropped to par, was one of my points of why one would hold until redemption. But like I said, I’m not able to check into this further right now. 2WR will likely chime in with more info on the accrual of interest, should it apply here with this oddly timed call RILY made.
We’ve entered very strange times when you can get a RILY baby bond for sub 6%. RILYT at 6.00% seemed like it would be the floor for yields. Nope.
FD: We own several RILY issues.
A4I – Tomorrow, my oversized bet on RILYZ gets monetized, so that’s good, but I’ve already replaced to a lesser degree with RILYO and am also keeping the called or nearly called position going now with RILYG. I like the ’24 maturity of RILYO plus being callable now at 25.50 makes a current call moot imho.. At time I bot right after K got priced, YTW was the ’23 call at $25 and was 5.79% and YTM 6.05% . I also continue to hold RILYH.
So how come CA is not in your rearview mirror?
My RILYZ ‘bet’ was cashed in 2 days before the shares were taken in by my broker, meaning that I received any cap gains plus the full accrued interest. Why hold it for a near net zero situation – meaning for the last payment prior to maturity/call? If for example, a security is selling for 25.50 and is called away, sure, you’ll get the .50 but then the price of the security immediately falls to or near 0, so where is the gain? It is a near net zero situation. You get a .50 payment and you immediatly lose .50 off of the price.
Unlike some others here (not you), I think RILY’s numbers speak for themselves and we proudly hold oversized positions in multiple issues.
I can understand why you asked, but CA isn’t in any of my mirrors. Actually, I’d like to see it cut off of the continent and pushed out to sea. Capitalism and liberty please, not iron-fisted Marxism.
I don’t see any accrued interest… My Rily Z was redeemed at EXACTLY $25. Is the interest going to be deposited later? Seems there was some discussion on this earlier, but I can’t seem to find the thread.
My last interest payment hit my account on 2/1
Mark – No need for concern… Just monitor your broker…. I’m in the same boat with Fidelity and TDA both, but it happens frequently… Most likely it will get posted either later on today or by tomorrow at the latest…
And A4I, you’re right it’s hardly worth it to hold vs sell at essentially the same price a day or two before, but allowing it to go to maturity is an easy excuse when you’re not too keen on reinvesting ideas at the momentand are not all that concerned about having dry powder…. And in a taxable account, I’ve wondered if owning something like RILYZ at 25.15 for example and holding it to call makes any difference vs selling it at 25.30, but I’ve never bothered to really find out… In other words, if its called, do I officially take a tax loss and collect the interest income vs if I sell do I then take a profit but not show the income? I’ve never even bothered to see how TurboTax handles situations like this…. I bet someone in our III community knows the facts for sure, though.
I just finished my taxes and yes, selling would net a capital gain, whereas letting it be called would give you a loss and interest. Happened to me several times last year. Whether that’s a difference that matters depends on your tax situation.
Irish – thanks… that’s how I was thinking for myself at least- that in my circumstance, the difference couldn’t matter enough to make it bothersome either way.